I have taken over my parents rental properties in San Diego and they haven’t been managed properly. I have a few questions I’m hoping you can help me with.
1. Non of the tenants have updated contracts which I’m working on updating. Can I issue a new contract and date it for the following month so I can increase the rent?
2. Anyone have any advice on having a company do an inspection before renewing contracts? During this covid time has anyone run into issues?
3. One of the properties has items on the front porch that I would like removed but she is under section 8.. can I issue a contract of my own and have her remove the items within a set time frame?
4. Another tenant has a big front yard that used to be parking spots..has anyone ever asked a tenet to remove personal belongings so that I can make them parking spaces once more? It has become an issue with tenants having front and back yards they have put boards up or sheets to not allow the other tenants to see and it makes the properties look horrible. I was thinking of just removing all of the gates and making one community area.
Please let me know if you have any books or if you have any vendors in mind for property located in National City, CA.
Wow. Lots of questions. One thing I try to remind new landlords is that as much as this is real estate, this is a people business. People respond to how you make them feel. We are in a tough spot as landlords right now. The tenants have the upper hand with not having to pay rent. I am sure California is a tenant friendly state, so you may want to implement change slowly. Going in with “There’s a new sherif in town” attitude may cause a reaction from your tenants that you are not looking for. Remember turnover is one of the biggest expenses landlords face.
1. Updated leases. You can rent month-to-month or on a lease for a period of time. You have to know what your local laws are with notification. Generally, notice is required 30 days prior to raising the rent, but CA may have different rules. Consider giving your tenant options. For example: I had a tenant paying $2050 a month on a month to month. I prefer a lease and I wanted to raise the rent. I sent a notice to the tenant informing them that they can go on a annual lease for $2,100 a month or stay month to month for $2200. I gave them 5 months notice. It is more than I had to, but it gave them time to make a decision on what avenue they wanted to choose to include moving.
I approached it in case I am facing a judge I can tell the court I gave sufficient notice for the tenants to make preparations to move if they didn’t like the rent increase.
You probably don’t want all your leases to expire at the same time. Consider staggering them.
2. You can probably arrange doing the inspection yourself. I generally do not inspect my tenants properties unless they are moving out.
3. The items on the front porch are they a hazard? Any complaints from the local municipality?
As you said, these properties weren’t managed and you may find that they weren’t maintained well either. The propertied may need more repairs than you imagine. I would take a not so stron approach. Go slow. Start with one unit and move onto the next with the current climate in mind. A mass exodus of your tenants can cause you a financial hardship.
As for books “The ABCs of Property Management” comes to mind as well as Rich Dad Poor Dad
It sounds like this is a MF that was not built recently. I have no S8 experience, so will not address anything related to S8. Here are some items that are of impact.
- In CA, MF units are rent controlled. The maximum you can raise rent in a one year duration is 5% plus local inflation rate.
If a tenant has been a tenant over 1 year, they get 2 months notice for the rent increase.
- The rent control regulation dictates that you cannot reduce what is provided by the rental. This could make it difficult to recover property for community property that someone has been treating as part of their rented property. If the lease is clear this is community property and/or forbids personal items there, that would have protected you but in the absence of a lease the lease will not be of help.
- The rent control law dictates that if the LL was to maintain the right to move family in the unit, the tenants were to be provided text to this affect prior to the rent control going into effect. The implication is that in the absence of this notice, the LL does not maintain the right to move in family, but the text does not spell this out. I would argue in the absence of clear text stating such, that the notice can be provided at any time. The rent control ordinance provides the exact verbiage to use.
The rent control makes it difficult to evict tenants. If the tenant is in violation of the lease (what lease?), the tenant is to be provided the opportunity to correct the issue. It is not easy to get rid of poor tenants for lease violations.
- Other than for moving family into a unit, the other means to get rid of tenants is by doing a substantial rehab. To me substantial must include either a kitchen or a bathroom.
Properties that are not well managed end up resulting in more hassle than managing them properly in the first place.
One positive for you is most tenants are not familiar with the protections provided by the rent control regulations. An option could be to ignore the rent control regulations and hope none of the tenants are educated into what the law states.
The advice above is great. I'd suggest getting a few books (Heather & Brandon Turner's 'The Book On Managing Properties is a great, quick read) and joining a few real estate (virtual) meet ups to get to know other landlords locally/network. Most importantly you need to know the local laws. Best of luck.